Reserve Bank of India (Non-Banking Financial Companies – Managing Risks in Outsourcing) Directions, 2025
UR
- Applies toFinance companies
- StatusIn force
- IssuedNovember 28, 2025
- Amendmentsnone tracked
- Length63 points in 5 sections · 6 min read
The four dates on this rule
- PublishedNovember 28, 2025The day RBI put this document out. This is the same day as the Issued date on this rule.
- Starts to applyNovember 28, 2025The day this rule starts to apply, as RBI's own text states it.
- Time to get readyNoneIt starts to apply on the day it was published.
- Last date to actApril 10, 2026The day by which the work this rule asks for must be finished.
Kept in your browser only. Your desk
Show me the points for
Nothing is removed from the page.
What it says
How firm is each point
Stated by RBI — RBI’s own paragraph says this. We have only made it plainer.
Our reading — BankPulse read RBI’s paragraph and shortened it. The paragraph is the authority, not this line.
Needs judgement — RBI leaves this to the bank to settle, so nobody can give you a fixed number here.
Chapter I. Preliminary
1. Deadline for existing deals
Existing IT outsourcing deals must follow these rules by April 10, 2026, or renewal, whichever comes first.
2. Outsourcing rules for NBFCs
This document sets the outsourcing rules for non-banking financial companies.
3. Start date
These Directions came into effect on the day the Reserve Bank issued them.
4. Who is covered
These Directions apply to every non-banking financial company.
5. Lighter rules for Base layer
Base layer NBFCs follow this rule less fully than Middle and Upper layer NBFCs.
Chapter II. Role of the Board
1. Responsibility stays with NBFC
Outsourcing a task never lowers the NBFC's own responsibility for it.
Chapter III. Outsourcing of Financial Services
Must know
1. Contract risk named
There is a risk that the deal with the provider cannot be enforced.
2. No mixing of records
Where a provider serves many firms, records must not be mixed.
3. Own operations must survive
Work must not stop if a group firm's premises or systems go down.
4. Not answerable for the group
No advert may say the lender stands behind a group firm's dues.
5. Thirty days to complain
The lender must give customers a 30-day window to raise their complaints.
Do it
6. Control stays at home
The lender must keep full control of the work it gives out.
7. Ten risks to weigh
Ten named risks must be weighed before work is given out.
8. Guard the customer data
Customer data held by the provider must be kept safe.
9. Watch their security
The lender must check the provider's safety steps often, and note any breach.
BankPulse example. A bank hires an outside firm to host its records. Signing the contract is not the end of it. The bank must review and monitor that provider's security practices and control processes on a regular basis.
10. Keep our records separable
The provider must be able to pick out our records and assets.
11. Due diligence each renewal
The provider must be checked when hired and again at each renewal.
BankPulse example. A bank's outsourcing arrangement comes up for renewal after three years. Due diligence is done again, not only when it was first signed. The question each time is whether the service provider can still meet the obligations.
12. Look outside as well
Outside reviews and market feedback should back up our own checks.
BankPulse example. A bank's own checks on a provider are not the whole picture. It also obtains independent reviews and market feedback on that service provider. Those supplement the findings of its own due diligence.
13. Systems must fit
The provider's systems must work with ours, and their service must be good enough.
14. Lawyer must vet it
A lawyer must check the written deal and say it will hold.
15. Agreement must handle risk
The deal must name the risks and say how they will be held down.
16. Room to step in
The deal must leave room to step in to meet the law.
17. Say what the relationship is
The deal must say whether the tie is agent and principal, or not.
18. A structure to watch it
There must be a team in place to watch and steer the work given out.
19. A yearly financial review
The provider's money and work health must be checked at least once a year.
20. Report any slippage
The review must bring out any drop in service, secrecy or safety.
21. Reconcile in time
Deals with the provider and its helpers must be matched up on time.
22. Continuity must be tested
The provider must write down, keep and test its plans to keep work going.
23. Test it together
The provider must test the plan from time to time, and joint drills may be held.
24. Have a way back
The backup plan must look at another provider, or taking the work back.
25. Shared premises, clear identity
Where a group firm shares the premises, its name must be clear to customers.
26. Say who is selling
Leaflets and staff must make clear how the group firm is tied to the lender.
27. Group party, same rules
Work given to a group firm must follow the same rules as work given outside.
28. Watch the host country
Where a provider is abroad, its country's rule and politics must be watched.
29. Tell the customer
Where a customer must deal with a provider, the leaflet must say so.
30. Grievances without delay
The named officer must see that real customer complaints are put right fast.
Background
31. Duties do not move out
Giving work out does not cut what the lender owes its customers or RBI.
32. Suspicious reports stay ours
Cash and suspicious deal reports stay the lender's own job.
33. Compliance risk named
There is a risk that giving work out breaks privacy or other law.
34. Need to know only
A provider's staff may see customer data only where the job needs it.
35. Only confidential jurisdictions
Work may go abroad only to a country that upholds secrecy terms.
36. Complaint responsibility
The NBFC alone is responsible for fixing complaints about outsourced services.
Chapter IV. Outsourcing of Information Technology (IT) Services
Must know
1. Nothing deleted in transition
The provider may not wipe or change data while the work is being moved.
Do it
2. Weigh the IT case
The case for giving out an IT job must be weighed against its risks.
3. A framework for IT risk
A risk plan must cover how IT risks are found, sized and reported.
4. Too much with one provider
The lender must weigh the risk of leaning on one provider too much.
5. Put it in writing
What each side owes the other must be set out in a written deal that binds.
6. Audit the provider
The lender must audit the provider and anyone it hires.
7. An inventory of IT services
The lender must keep a list of the IT jobs it has given out.
8. Map the dependency
The lender must map how much it leans on outside firms.
9. An exit plan required
The IT policy must set out a clear way to end the deal and keep work going.
10. Plan for each way out
The exit plan must cover each way the deal may end, and the time each needs.
11. Name the alternative
The exit plan must identify who else could do the work, or whether it comes back in-house.
12. Destroy the data safely
The deal must say how data and records are to be wiped or destroyed.
13. Must help the successor
The provider is bound to help the next provider hand over smoothly.
14. Announce the ending
Where a provider dealt with customers, the end of the deal must be made known.
15. Group choice on merit
A group firm must be picked on the same plain grounds as an outside firm.
16. Arm's length always
The lender must always deal with group firms at arm's length.
Background
17. Pooled vendor audits
Regulated entities using the same vendor, the NBFC included, may share one pooled audit instead of separate ones.
18. Risk sets the audit cycle
How often the audit happens turns on the risk and what is at stake.
19. Board hears the bad news
Reports go to senior staff, and anything bad goes up to the Board.
Chapter V. Repeal and Other Provisions
1. Older rules cancelled
This document cancels all older outsourcing rules for non-banking financial companies.
2. Old cases continue
Action already taken under the old rules stays governed by them.
The same subject for other kinds of institution
The same subject for other kinds of institution.
Other RBI rules for NBFCs
Every rule page on BankPulse · Questions bankers ask, answered